C-240/83

JUDGMENT OF 7. 2. 1985 — CASE 240/83

JUDGMENT OF THE COURT 7 February 1985

In Case 240/83

REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunal de Grande Instance [Regional Court], Créteil, for a preliminary ruling in the proceedings pending before that court between

Procureur de la République [Public Prosecutor]

and

1 — Language of the Case: French.

PROCUREUR DE LA RÉPUBLIQUE / ADBHU

JUDGMENT

Facts and Issues The facts of the case, the course of the the recovery of waste oils' (Journal Officiel procedure and the observations submitted to de la République Française of 23 November the Court may be summarized as follows: 1979, p. 2903).

JUDGMENT OF 7. 2. 1985 — CASE 240/83

1979 on the conditions under which waste oils were inappropriate. However, in so far oils are to be collected) ; as those rules were adopted in order to implement Directive No 75/439, the The disposal of waste oils is likewise subject Association directed its complaints against to an approval issued by the Minister for the that directive. Environment; In view of the fact that Article 3 of the directive provides that Member States must Approved disposal undertakings must treat take the necessary measures to ensure that, the waste oils in their own plants, or their as far as possible, the disposal of waste oils approval may be withdrawn; is carried out by recycling (regeneration and/or combusion other than for destruc­ The treatment of waste oils must be carried tion) and that Article 4 prohibits only the out by recycling or regeneration in discharge of waste oils into waters or the conditions which are economically viable, or soil and processing which causes too much if that is not possible, by industrial use as pollution, the Association questions, in the fuel in approved plants'. first place, whether the directive can constitute legal grounds justifying the 1.3. The Association de Défense des prohibition of burning. In addition it Brûleurs d'Huiles Usagées [association for contests the validity of the provisions of the the defence of the interests of burners of directive having regard to the principles of waste oils, hereinafter referred to as 'the freedom of trade, the free movement of Association'] was founded in France on 16 goods and free competition, which are October 1980. According to its articles, its affected respectively by the administrative aim and object is to defend the interests of procedure for approval provided for in manufacturers, dealers and users of stoves Article 6, by the system of zones authorized and heating appliances which are designed by Article 5 and by the grant of to burn both fuel oil and waste oils. 'indemnities' referred to in Articles 13 and 14 of Directive No 75/439.

PROCUREUR DE LA RÉPUBLIQUE / ADBHU

October 1983. it lays down rules for the disposal of waste oils and, in particular, prohibits the burning In accordance with Article 20 of the of such oils, those restrictions are justified Protocol on the Statute of the Court of by the objectives of general interest pursued Justice of the EEC, written observations by the Communities. were submitted by the Commission of the European Communities, represented by its In the Commission's view there can be no Legal Adviser, Jean Amphoux, by the doubt that the protection of the Council of the European Communities, environment against the risk of pollution represented by Jill Aussant, a Principal constitutes an object of general interest Administrator in the Council's Legal which the Community may legitimately Service, by the Government of the French

Moreover, when burned, they may give off into the Upon hearing the report of the Judge-Rap atmosphere considerable quantities of porteur and the views of the Advocate chlorine and hydrocarbons. The General, the Court decided to open the oral Commission joins to its observations a procedure without any preparatory inquiry. lengthy scientific study and tables presenting the results of analyses carried out by various 2. Summary of the observations submitted institutions in different countries which to the Court show clearly that those oils may contain a very high proportion of harmful substances.

The

combustion of such oils in traditional plants The Commission points out that restrictions can lead to considerable pollution of the on the burning of waste oils in small plants immediate environment of such plants. or for heating purposes also exist in the Federal Republic of Germany and that a The Commission concludes that there can proposal for a directive, which is in the therefore be no doubt that rules intended to process of being drawn up by the control the use of waste oils with a view to Commission, envisages the need for prior protecting the environment correspond to approval for any combustion plant using an objective in the common interest. such oils. The Commission also submits that the restrictions which the directive imposes on As regards the compatibility with the the persons concerned are not excessive and principle of the freedom of trade of the do not represent an intolerable interference requirement under Article 6 of the directive in their rights which is out of proportion to that any undertaking which disposes of the object pursued in the common interest. waste oils must obtain a permit, the Commission maintains that the requirement As regards more specifically the burning of is fully justified by the objectives it pursues waste oils, which is the aspect of the in the common interest and that it in no problem with which the proceedings before way appears to be a disproportionate means the national court are concerned, the of attaining such objectives.

competent authorities. There is nothing in control of the disposal of waste oils. There those requirements which cannot be justified is nothing unusual in such a control. Pro with regard to the objectives pursued. cedures for prior authorization are As regards combustion of waste oils, the customary in the legal systems of all the French rules adopted for the Member States as safeguards on dangerous implementation of the directive do indeed operations. go further than the directive in the restrictions imposed on potential users of Such preventive control is the only really waste oils, inasmuch as they authorize only effective and appropriate solution in view of 'industrial use' of oils as fuel and exclude all the irremediable nature of the damage if the burning of such oils for domestic purposes. risks materialized and the heavy economic and social costs inherent in developing the Nevertheless it cannot be said that because necessary technical means to prevent such the French rules impose those additional damage or even more to prevent such requirements they depart from the system damage recurring. provided for in the directive.

PROCUREUR DE LA RÉPUBLIQUE / ADBHU

aims other than those which correspond to the sense of financial aid without anything the implementation of Directive No 75/439 being given in return. The payments in in relation to the grant of approval to question are in fact 'indemnities' for services undertakings which dispose of waste oils. rendered 'in return' for the obligations which the Member States impose on The Commission then examines the collection or disposal undertakings, in compatibility of Article 5 of Directive No accordance with the directive. 75/439 with the rules of the Treaty guaranteeing the free movement of goods in Although those indemnities may be financed intra-Community trade. In order to ensure out of public funds, possibly, according to that all waste oils are collected and disposed Article 14, by a charge imposed on products of safely, Article 5 authorizes the Member which after use are transformed into waste States to 'take the necessary measures to oils, or on waste oils, the indemnities may ensure that one or more undertakings carry be regarded only as the price paid in return out the collection and/or disposal of the for services provided by the collection or products offered to them by holders, where disposal undertakings. appropriate in the zone assigned to them by the competent authorities'. Moreover, Article 13 places strict limits and conditions on the calculation and the grant The Commission points out that the Court of those indemnities. has already recognized that Article 5 of the directive is compatible with the rules of the Treaty concerning the free movement of On the basis of the foregoing, the goods, in its judgment of 10 March 1983 in Commission proposes that the' following Case 172/82, Inter-Huiles. reply should be given to the questions referred to the Court:

JUDGMENT OF 7. 2. 1985 — CASE 240/83

trade. In conclusion the Council proposes that the The system of zones is the last means of Court should give the following reply to the attaining the objective of the safe collection first question submitted by the national and disposal of waste oils. The Council court: considers that it in no way constitutes a '(a) The compatibility of the directive with barrier to the free movement of those the principles laid down by the Treaty products within the common market, of Rome should be examined with because, as the Council interprets it, only regard to the provisions of the directive the collection must be carried out within the which are called in question and not in zone and not the disposal, which may be relation to the system which it lays carried out in the country or abroad. down for the disposal of waste oils; The Council maintains that the subsidies are not subsidies as such but 'indemnities for (b) The objectives of the directive as set services rendered'. The Council emphasizes out in the preamble are compatible with that the undertakings which actually render the free movement of goods, free their services are paid, not at the discretion competition and the freedom of trade of the Member States, but in accordance (in the sense of the freedom to provide with criteria laid down in Article 13 of the services); directive, which provides that the (c) The provisions of the directive correctly indemnities must not exceed annual reflect its objectives and in no way uncovered costs actually recorded by the offend against any of the principles of undertakings taking into account a the Treaty referred to in the question

competition. In the French Government's view the directive leaves Member States the choice The Council thus considers that the safe with regard to the disposal of waste oils of guards against distortions of competition adopting either a mixed solution combining

the regeneration and the combustion of It considers, in particular, that means of waste oils or of opting for one of the two purifying the polluted air which possible methods provided for in the efficaciously meet the requirements of waste directive. If a Member State does opt for oils, whose composition is constantly one method, it may prohibit recourse to the changing, can only be applied in large other. incinerators. According to the German Government, it is not possible in small Since the directive gives no indication incinerators with today's technology to limit concerning the way in which a division harmful emissions economically and in a between the two systems shall operate, it way which may be supervised by the auth appears that the Member States which have orities. chosen the combined solution are at liberty to determine such balance between burning The German Government produces figures and regeneration as they see fit. concerning the emissions from the burning of waste oils, which show the harmful effect The French Government, therefore, requests which that technique has on the

2.5. As regards the first question, the 2.4. The Government of the Federal Italian Government considers that, in its Republic of Germany submitted observations judgment of 10 March 1983 in Case solely in connection with the second 172/82, the Court recognized the validity of question referred for a preliminary ruling. the basic principles of the system set up by It maintains that Article 3 of the directive, the directive as means of ensuring the satis which concerns methods of disposing of factory management of waste oils, both waste oils, provides Member States with from the point of view of the recovery of three alternatives which correspond to the energy and from that of the protection of methods used in those States at the time of the environment. the adoption of the directive. Any incompatibility of that system with the Treaty results from the introduction of It is certainly not possible to infer from barriers restricting exports of such products Article 3 of the directive that Member States to other Member States. The reply to the must authorize the destruction of waste oils first question should therefore be in the by burning. affirmative. The German Government points out that As regards the second question, the Italian both in the Federal Republic of Germany Government maintains that in the scheme of and in France the principal method of the directive, burning is regarded as an disposal of the oils in question is acceptable and effective means of disposing regeneration in a manner which is efficient of waste oils, as is clear from Article 3. from the point of view of energy policy and which does not pollute the environment. In The parenthetic phrase 'as far as possible' principle, burning in small incinerators is contained in that provision must, it seems,

JUDGMENT OF 7. 2. 1985 — CASE 240/83

It is conceded, however, that the recycling the implementation of Articles 2, 4 and 5 of of waste oils by combustion may be par­ the directive in question.' ticularly harmful to the cleanliness of the air. 3. Oral Procedure According to the Italian Government, the At the sitting on 4 October 1984 oral burning of waste oils is an activity which argument was presented by the following: should be regulated with controls on the Association de Défense des Brûleurs persons who are authorized to exercise it. d'Huiles Usagées, represented by Maître Mauro; the Government of the French In consequence, the Italian Government Republic, represented by G. Boivineau; the proposes that, in reply to the second Government of the Italian Republic, question, the Court should state that: represented by P.G. Ferri; the Commission, 'Directive No 75/439/EEC may constitute represented by J. Amphoux; and the legal grounds justifying the prohibition of Council of the European Communities, the burning of waste oils inasmuch as that represented by J. Aussant. prohibition represents, in pursuance of the The Advocate General delivered his opinion national legislation, a measure necessary for at the sitting on 22 November 1984.

Decision

1 By judgment of 23 March 1983, which was received at the Court on 24 October 1983, the Tribunal de Grande Instance [Regional Court], Créteil, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation and validity of Council Directive No 75/439/EEC of 16 June 1975 on the disposal of waste oils (Official Journal 1975 L 194, p. 23), in order to ascertain whether French Decree No 79-981 of 21 November 1979 laying down rules for the recovery of waste oil (Journal Officiel de la République Française of 23 November 1979, p. 2900) and its implementing orders were compatible with Community legislation inasmuch as they contained provisions prohibiting the use of such oils as fuel.

4 In pursuance of the directive, on 21 November 1979 the French Government adopted Decree No 79-981 laying down rules for the recovery of waste oils, together with the two above-mentioned implementing orders of the same date. Under those provisions French territory was divided into zones and a system was established for the approval both of waste-oil collectors and of the undertakings responsible for disposing of waste oils. Under Article 3 of Decree No 79-981, holders of waste oils must either deliver them to collectors approved pursuant to Article 4 thereof, or make them directly available to a disposal undertaking which has obtained the approval required by Article 8, or else perform the disposal themselves if they have been granted such an approval. Article 6 of the decree requires collectors to surrender the oils collected to approved disposal under­ takings. Article 7 lays down that 'the only permitted methods for disposing of waste oils... are recycling or regeneration under economically acceptable conditions, or else industrial use as fuel'. With respect to such industrial use, the second paragraph of Article 2 of the implementing order on the conditions for the disposal of waste oils provides that disposal by burning must take place 'in a plant which has been approved for the purposes of environmental protection'.

5 Since the legislation in question was adopted pursuant to Directive No 75/439, the Association raised before the national court the question whether that directive could constitute a legal basis for the prohibition of the burning of waste oils. Furthermore, doubts were expressed as to the validity of the directive in the light of certain fundamental principles of Community law.

8 In those circumstances it is appropriate to consider, first, the provisions of the directive relating to the system for the assignment of zones (Article 5) and for the prior issuing of permits to disposal undertakings (Article 6) and, secondly, the system for granting indemnities (Articles 13 and 14).

Articles 5 and 6 of the directive

9 The national court asks whether the system of permits is compatible with the principles of free trade, free movement of goods and freedom of competition, but does not elaborate further. In that connection it should be borne in mind that the principles of free movement of goods and freedom of competition, together with freedom of trade as a fundamental right, are general principles of Community law of which the Court ensures observance. The above-mentioned provisions of the directive should therefore be reviewed in the light of those principles.

10 As to whether the system of granting approvals by zones for the collection of waste oils is consistent with the principle of free movement of goods, the Commission and the Council, and also the Italian Government, emphasize in their observations that, in the first place, Article 5 of the directive permits the creation of zones only in exceptional circumstances, in particular in cases where no other, less restrictive, system seems to be feasible. They go on to argue that, in conformity with the Treaty, the directive as a whole does not obstruct the free movement of waste oils.

PROCUREUR DE LA RÉPUBLIQUE / ADBHU

11 Whilst conceding that a system of approvals is bound to have a restrictive effect on freedom of trade, the Council and the Commission argue that the measure envisaged by Article 6 of the directive pursues an aim which is of general interest, by seeking to ensure that the disposal of waste oils is carried out in a way which avoids harm to the environment.

15 It follows from the foregoing that the measures prescribed by the directive do not create barriers to intra-Community trade, and that in so far as such measures, in particular the requirement that permits must be obtained in advance, have a restrictive effect on the freedom of trade and of competition, they must nevertheless neither be discriminatory nor go beyond the inevitable restrictions which are justified by the pursuit of the objective of environmental protection, which is in the general interest. That being so, Articles 5 and 6 cannot be regarded

JUDGMENT OF 7. 2. 1985 — CASE 240/83

as incompatible with the fundamental principles of Community law mentioned above.

Articles 13 and 14 of the directive

16 The articles in question provide for the possibility of undertakings being granted indemnities for the services which they perform in collecting and / or disposing of waste oils.

17 It is apparent from the request for a preliminary ruling that the question to be answered is whether those indemnities are consistent with the requirements of free competition, and in particular with Articles 92 to 94 of the Treaty, which prohibit the granting of aid by Member States.

23 In the second part of the question the national court enquires whether Directive No 75/439, in implementation of which the French legislation was adopted, justifies the prohibition of the burning of waste oils.

PROCUREUR DE LA RÉPUBLIQUE / ADBHU

24 The German, French and Italian Governments and the Commission advocate an affirmative reply. They argue that the uncontrolled burning of waste oils contributes significantly to air pollution and, consequently, that a prohibition of oil-burning in any plant which does not incorporate adequate safeguards is in conformity with the objectives of the directive. The Italian Government adds that the disposal of waste oil by burning carried out by persons authorized for that purpose must be the subject of rules and inspections.

25 As has already been emphasized, the main aim of the directive is the disposal of waste oil in a manner which is safe for the environment, and Article 2 makes it incumbent upon the Member States to pursue that aim.

26 Article 3 of the directive provides that 'Member States shall take the necessary measures to ensure that, as far as possible, the disposal of waste oils is carried out by recycling (regeneration and/or combustion other than for destruction)' and Article 4 provides that Member States must prohibit any deposit, discharge or processing of waste oils in such a way as to cause harmful effects on water, soil or air.

27 In order to ensure compliance with those measures, Article 6 provides that any undertaking which disposes of waste oils must obtain a permit granted by the competent national authority, if necessary after an inspection of the installations, with a view to imposing the conditions required by the state of technical development.

On those grounds, THE COURT

in answer to the questions referred to it by the Tribunal de Grande Instance, Créteil, by a judgment of 23 March 1983, hereby rules as follows:

(1) Consideration of Articles 5, 6, 13 and 14 of Council Directive No 75/439/EEC of 16 June 1975 has disclosed no factor of such a kind as to affect their validity.

(2) The prohibition of the burning of waste oils in conditions other than those permitted under legislation such as the French legislation is not inconsistent with Directive No 75/439/EEC.

Mackenzie Stuart Bosco Kakouris

Koopmans Everling Galmot Joliét